Proper Reporting of a CC Charge Off

Discussion in 'Credit Talk' started by Spud, Jul 18, 2008.

  1. Spud

    Spud Member

    Greetings members. New member who has never posted before, but has been reading the forums and learning so that I can (hopefully) express in a meaningful way the information I need. Let's give it a shot.

    For a credit card that has been charged off, what would the proper way for the OC to report? Would I be out of line in the thinking that the account should be listed as CO, zero balance and closed at the issuers request?

    As a second part to this, when a CO has been purchased (not assigned) by JDB'er, am I out of line in thinking that the account should report as a collection, not a revolving or open account, and that the balance should be the balance of the CO'ed account purchased?

    I am finding various differences in opinions on this on various forums, and would like to form an opinion as how to proceed with my cleanup efforts.

    Many thanks for any responses.
  2. NightStar

    NightStar Well-Known Member

    A charge off will show a balance, it does not wipe out the balance having charged off. It just means that the creditor is taking a tax break from the IRS.

    Now if the creditor assigns the debt then both the CA and OC would report the same balance owing.

    Now if the creditor sells the debt then the CA would report a balance and OC would report sold / zero balance.
  3. Spud

    Spud Member

    Thank you Nightstar, this is the information I am attempting to clarify. If I may continue - now that the OC has sold to a CA/JDB, does that CA/JDB report as an open or as a collection account? To add further to the mix, and I apologize for dragging this out, if the CA/JDB that purchased the OC debt then resells the account to another CA/JDB, should they also report as sold and zero balance?

    I have been reading that only the OC and one CA/JDB can report any single account at the same time, would this be correct?

    Thanks in advance to Nightstar and anyone else that may wish to weigh in on this.
  4. NightStar

    NightStar Well-Known Member

    The original creditor can assign to a collection agency, if they pull a collection back - then that collection agency would remove the reporting all together. If they assigned to a new collection agency then they would be able to report the new balance.

    If the original creditor sold to a collection agency then they sold to another collection agency, then that 1st collection agency would still report, but it must be updated to show zero balance, and the new collection agency would pick up reporting the balance.

    The collection agency should not be reporting open account, all accounts that come to them are closed.
  5. Spud

    Spud Member

    Thank you Nightstar

    I appreciate you taking the time to answer my questions, you have been quite helpful.
  6. NightStar

    NightStar Well-Known Member

    I worked 4 1/2 years for a credit bureau and the owner of the credit bureau also ran a collection agency and he explained the relationships to me while I was there. It was a very interesting job. Very glad that I got the opportunity.

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